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HomeMy WebLinkAboutAgenda Packet 1997/11/04 "I declare under penalty of perjury that -I am em;>lo'{ed b:1 t~e City of Chula Vista in the Office of '.;;,e Ci >.y Cieri, and that I posted this Ac;oncla/Noti:e on the Bulletin Board at Tuesday, November 4, 1997 the PubHc S rvices Building aRIi ...6 ,.... _ -{Iall on DATED, /tJ SIGNED 6.;'i~ ~. 4:00 p.m. c-:7- _ REVISED Regular Meeting of the City of Chula Vista City Council Council Chambers Public Services Building CALL TO ORDER 1. ROLL CALL: Councilmembers Moot _' Padilla _, Rindone _' Salas _, and Mayor Horton _' 2. PLEDGE OF ALLEGIANCE TO THE FLAG. MOMENT OF SILENCE 3. APPROVAL OF MINUTES: October 21, 1997. 4. SPECIAL ORDERS OF THE DAY: a. Oath of Oftice: Helga Rindone - Child Care Commission; and Peter Morlan - Dosign Royiow Commission. b. Liz Jackson of Pacific Bay Homes will present a check in the amount of 5.4 million dollars to the City of Chula Vista for the development of their park in Rolling Hills. c. Senator Wadie Deddeh will present a year-end wrap up of the ,ocontly completed 1997 legislative session in Sacramento, discussing those bills and issues on which Chula Vista took positions of support or opposition. CONSENT CALENDAR (Irem.' 5 through 8) The staff recommendations regarding the following items listed under the Consent Calendar will be enacted by the Council by one motion without discussion unless a Councilmember, a member of the public, or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" availnble in the lobby and submit it to the City Clerk prior to the meeting. /tems pulled from the Consent Calendar will be discussed after Board and Commission Recommendations and Action Items. Items pulled by the public will be the first items of business. 5. WRITTEN COMMUNICATIONS: a. Letter from the City Attorney stating that to the hest of his knowledge from observance of actions taken in Closed Session on 10/28/97 in which the City Attorney participated, that there were no actions taken which are required under the Brown Act to be reported. It is recommended that the letter he nxeived and filed. b. Letter from Jerry LaRussa. Principal, Castle Park Middle School, requesting that the assistance given to the children of Chula Vista Vis-A-Vis. the after hours recreational program, be distributed equally to all Chula Vista middle schnols. Stall will address this issue as part of the Middle School Agenda Statement which will go before Council at the meding of 11/11/97. Agenda -2- November 4, 1997 6. ORDINANCE 2714 AMENDING SCHEDULE X OF A REGISTER OF SCHEDULES MAINTAINED BY THE CITY ENGINEER AS PROVIDED IN SECTION 10.48.020 OF THE MUNICIPAL CODE - ESTABLISHED SPEED LIMITS IN CERTAIN ZONES AND ESTABLISHING A SPEED LIMIT OF 35 MPH ON SOUTH GREENSVIEW DRIVE FROM CLUBHOUSE DRIVE TO HUNTE PARKWAY, ADDING THIS LOCATION TO SCHEDULE X (second readin!! and adoption) - Based on the provisions of the California Vehicle Code Section 22357 and 22358, and pursuant to authority under the Municipal Code Section 10.48.020, the City Engineer has detennined that in the interest of minimizing traffic hazards and traffic congestion, and for the promotion of public safety, there is a need to establish a speed limit on South Greensview Drive between Clubhouse Drive and Hunte Parkway. This street has recently been completed and opened to traffic serving major portions of EastLake Greens. An Engineering and Traffic Survey, as required by State law. has been conducted and it has been determined that the appropriate speed limit in this area is to be posted at 35 MPH. Staff recommends Council place the ordinance on second reading and adoption. (Director of Puhlic Works) 7. RESOLUTION 18808 ACCEPTING BIDS AND AWARDING PURCHASING AGREEMENTS FOR READY MIX CONCRETE, CALCIUM CHLORIDE, ASPHALTIC CONCRETE, EMULSIFIED ASPHALT, CLASS II AGGREGATE BASE, DECOMPOSED GRANITE, FILL SAND, AND RIP RAP - On 10/21197. hids were opened for the provision of various construction material for the Public Works Operations Division for the period of II 1l/97 through 6/30/98, with the option to extend the agreements for five additional one-year option years. Twenty-nine requests for bids were sent out with six hidders responding, one being local. Bidders could bid on any or all of the bid items. Staff recommends approval of the resolution awarding the purchasing agreements to CalMat, 8im J. Harris, H.G. Fenton Companies (East Coast Materials), and Ndson Sloan. (Director of Public Works and Director of Finance) 8. RESOLUTION 18809 APPROVING A $15,000 SEED CAPITAL CONTRIBUTION TO THE WESTERN REGIONAL BIOPROCESSING CENTER (WRBC) - The WRBC has been operating since August of last year on seed capital raised from San Diego biotech companies, Cal State, University Institute. SDSU. and the City. These funds were estimated to finance the prqject's formation stage for one year and have now been exhausted. Council is being requested to reprogram $15,000 in 1993/94 Community Development Block Grant funds to the WRBC seed capital fund to allow negotiations with the State Tax Franchise Board, IRS, and the corporate sponsor to be concluded. Staff recommends approval of the resolution. (Director of Conununity Development) * * * END OF CONSENT CALENDAR * * * ORAL COMMUNICATIONS This is an opportunity for the general public to address the City Council on any subject matter within the Council's jurisdiction that is not an item on this agenda for public discussion. (State law, however, generally prohibits the City Councilfrom taking action on any issues not included on the posted agenda.) If you wish to address the Council on such a subject, please complete the "Request to Speak Under Oral Communications Fomr" available in the lobby and submit it to the City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. L ~ ., Agenda -3- November 4. 1997 PUBLIC HEARINGS AND RELATED RESOLUTIONS AND ORDINANCES The following items have been advertised and/or posted as public hearings as required by ww. If you wish to speak to any item, please fill out the "Request to Speak Form" avaiwble in the lobby and submit it to the City Clerk prior to the meeting. None submitted. BOARD AND COMMISSION RECOMMENDATIONS This is the time the City Council will consider items which have been forwarded to them for consideration by one of the City's Boards, Commissions, and/or Committees. None submitted. ACTION ITEMS The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by the Council, staff, or members of the general public. The items will be considered individually by the Council and slalfrecommendations may in certain cases be presented in the alternative. Those who wish to speak, please fill out a "Request to Speak" form avaiwble in the lobby and submit it to the City Clerk prior to the meeting. None submitted. ITEMS PULLED FROM THE CONSENT CALENDAR This is the time the City Council will discuss items which have been removed from the Consent Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Councilmembers. OTHER BUSINESS 9. CITY MANAGER'S REPORT(S) a. Scheduling of meetings. b. Consideration of cancelling the November 11. 1997 Council meeting for Veterans Day. 10. MAYOR'S REPORTfS) a. Ratification of appointment to the Human Relations Commission - Maria Perman. b. Mid-Bayfront site - San Diego Padres Baseball Park. 11. COUNCIL COMMENTS ADJOURNMENT The meeting will adjourn to (a closed session and thence to) the regular City Council meeting on November 11, 1997 at 6:00 p.m. in the City Council Chambers. Tuesday, November 4, 1997 4:00 p.m. "I declere under penalty of perjury that I am emplo:.tod by t:",e (, i~y of Chula Vista in the Office of tile City Clark and that I posted this Agenda/NO,ke on the Bulletin Board at Council Chambers the Public ~;~es Building 6. ~~n "Public Services Building DATED. /~ . j. 77 SIGNED. , / - City nf Chula Vista Citv Council CLOSED SESSION AGENDA Effective April 1, 1994, there have been new amendments to the Brown Act. Unless the City Attorney, the City Manager or the City Council states otherwise at this time, the Council will discuss and deliberate on the following items of business which are permitted by law to be the subject of a closed session discussion, and which the Council is advised should be discussed in closed session to best protect the interests of the City. The Council is required by law to return to open session, issue any reports of final action taken in closed session, and the votes taken. However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated at this point in order to save costs so that the Council's return from closed session, reports of final action taken, and alljoumment will not be videotaped. Nevertheless, the report of final action taken will be recorded in the minutes which will be available in the City Clerk's Office. I. CONFERENCE WITH LEGAL COUNSEL REGARDING - Existing litigation pursuant to Government Code Section 54956.9 . Jones Intercable v. City of Chula Vista. . Wolfe v. City of Chula Vista. . Griftln v. City of Chula Vista. . USA v. City of San Diego. CONFERENCE WITH REAL PROPERTY NEGOTIATOR - Pursuant to Government Code Section 54956.8 . Property: Approximately 72.5 acres of property located at the southwest quadrant of Olay Valley Road and Olay Rio Road, Chula Vista. Negotiating parties: City of Chula Vista (Chris Salomone). Los Alisos Company, and Universal Concerts, Inc. Under negotiation: Tenns for modification of Ground L~a~e. Tri-Party Agreement, Suhlease and/or Settlem~nt agreement for the above-described property proposed for development into a 20,000 scat amphitheater. CONFERENCE WITH LABOR NEGOTIATOR - Pursuant to Government Code Section 54957.6 . Agency negotiator: John Goss or designee for CVEA, WCE, POA, IAFF, Executive Management, Mid-Management, and Unrepresented. Employ~ organization: Chula Vista Employees Association (CVEA) ami West~rn. Coun,cilyf Engineers (WCE), Police Officers Association (POA) and InternatIOnal AssociatIOn of Fife Fighters (IAFF). Unrepresented employee: Executive Management. Mid-Management, and Unrepresented. 2. REPORT OF ACTIONS TAKEN IN CLOSED SESSION I I ~!f?. ~~~ ~- -- " ." COY Of CHULA VISTA TR A NSMTTTA L MF.MOR A NOTJM October 29, 1997 TO The Honorable Mayor and City Council / S\{\ JohnD. Goss, CitYManager~ ~~\) City Council Meeting of November 4, M7 FROM SUBJECT This will transmit the agenda and related materials for the regular City Council meeting of Tuesday, November 4, 1997. Comments regarding the Written Communications are as follows: 5a. This is a letter from the City Attorney stating that to the best of his knowledge from observance of actions taken in Closed Session on 10/28/97 in which the City Attorney participated, there were no actions taken which are required under the Brown Act to be reported . IT IS RECOMMENDED THAT THIS LETTER BE RECEIVED AND FILED. 5b. This is a letter from Jerry LaRussa, Principal, Castle Park Middle School, requesting that the assistance given to the children of Chula Vista Vis-A-Vis, the after hours recreational program, be distributed equally to all Chula Vista middle schools. Staff will address this issue as part of the Middle School Agenda Statement which will go before Council at the meeting of November II, 1997. H:IHOMEIDONNATIMASTERSITRANSMIT.MEM ~~~ :- -~ ~ ~,.;:~~ ~~~~ CllY OF CHUlA VISTA OFFICE OF THE CITY A TIORNEY DATE: October 29, 1997 FROM: John M. Kaheny, City Attorney w/4 TO: The Honorable Mayor SUBJECT: Report Regarding Actions Taken for the Meeting of 10/28/97 Closed Session The City Council met in Closed Session to discuss the following: Existing and anticipated litigation pursuant to Government Code section 54956.9; Conference with real property negotiator; and Conference with labor negotiator. The City Attorney hereby reports to the best of his knowledge from observance of actions taken in the Closed Session in which the City Attorney participated, that there were no reportable actions which are required under the Brown Act to be reported. JMK:clb C:\Council\Closed.1 ~-J 276 FOURTH AVENUE, CHULA VISTA' CALIFORNIA 91910 . (619) 691-5037 . FAX (619) 585-5612 # PI:Isr-c.:ns..mrRe.)dedP48 CASTLE PARK MIDDLE SCHOOL "r: i;.. A Road to Success --=- ;,:r- !0Ui OCT 20 I ~c, I C;:...' October 15,1997 Q2 -t-t -<-< ("')0 r-"" m("') ::O:z: :111:<= cAr- 0> ""c:: ...,- _en ('"')-< m:r..- The Honorable Mayor Horton and Chula Vista City Council City of Chula Vista 276 Fourth Avenue Chula Vista. CA 91910 I II Ii II Dear Mayor Horton: As principal of Castle Park Middle School I an requesting that the assistance given to the children of Chula Vista Vis-A-Vis the after hours recreational program be distributed equally to .aIL Chula Vista Middle schools. I an requesting that this practice be adopted opposed to concentrating your efforts/assistance on one site. Because of the age of the middle school child (11-13) they are not able to drive and lack the means to travel to other school sites. Thank you for your consideration on this important matter. Sincerely, Jerry LaRussa JL:cc CI!-' c..; 1y HOJICt 'f'- e :+; c.J~rlL' .Je"S"S V())JU1 ieudC. ; , ,--' , ~ B t:f ::tJ ITI (') ITI < ITI o ;a c - w WRmEN COMMUNI CAnONS jf'97 Cc: ~~~) ~"ili'_cl" 160 Quintard Street ~ //1/1 ChulaVista.CA 91911-4499 ~ d vV'"; Phone (619) 691-5490 '<.../ V Fax (619) 427-8045 sb-J Sweetwater Union High Schoo) District ORDINANCE NO. ;;? / f AN ORDINANCE AMENDING SCHEDULE X OF A REGISTE~~y~\O~ OF SCHEDULES MAINTAINED BY THE CITY ENGi!N ~- AS PROVIDED IN SECTION 10.48.020 OF THE A VISTA MUNICIPAL CODE - ESTABLIS~~ EED LIMITS IN CERTAIN ZONES AND EST~HING A SPEED LIMIT OF 35 MPH ON~REENSVIEW DRIVE FROM CLUBHOUSE DRIVE NTE PA~KWAY, ADDING THIS LOCATION TO SCH ULE X WHEREAS, based on the provisions of the California Vehicle Code Section 22357 and 22358, and pursuant to authority under the Chula vista Municipal Code section 10.48.020, the city Engineer has determined that in the interest of minimizing traffic hazards and traffic congestion, and for the promotion of public safety, there is a need to establish speed limits on South Greensview Drive between Clubhouse Drive and Hunte Parkway because this street has recently been completed and opened to traffic serving major portions of EastLake Greens; and WHEREAS, a engineering and traffic study, as required by State Law, has been conducted and it has been determined that the appropriate speed in this area is to be posted at 35 MPH. NOW, THEREFORE, the City Council of the City of Chula Vista does ordain as follows: SECTION I: That Schedule X of a Register of Schedules maintained by the City Engineer as provided in Section 10.48.020 of the Chula Vista Municipal Code, Established Speed Limits in certain Zones and Establishing a Speed Limit of 35 MPH on South Greensview Drive from Clubhouse Drive to Hunte Parkway, adding this location to Schedule X, is hereby amended to include the following changes: Chula vista Municipal Code Section 10.48.02 - SCHEDULE X ESTABLISHED SPEED LIMITS IN CERTAIN ZONES Name of Street Beqinninq At Endinq At Proposed Speed Limit S. Greensview Clubhouse Hunte Parkway 35 M.P.H. Drive Drive SECTION II: This ordinance shall take effect and be in full force on the thirtieth day from and after its adoption. Presented by Approved as to form by John P. Lippitt, Director of Public Works c:\OA\SPEED.EST CL ~~ l~ John M. Kaheny, City Attorney tb~/ COUNCIL AGENDA STATEMENT ITEM TITLE: / .F''i51J <6' Resolution Accepting Bids and Awarding Purchasing Agreements for Ready Mix Concrete, Calcium Chloride, Asphaltic Concrete, Emulsified Asphalt, Class II Aggregate Base, Decomposed Granite, Fill Sand, and Rip Rap ItemJ Meeting Date 11/4/97 SUBMITTED BY: Director of Public Works Director of Finance It REVIEWED BY: City Manage~ 00 ~ 5ths Vote: Yes _ No.l0 On October 21, 1997, bids were opened in the office ~f~e Purchasing Agent for the provision of various construction materials for the Public Works Operations Division for the period of November 1, 1997 through June 30, 1998, with the option of the City to extend the contract for five additional one-year option years. Twenty-nine requests for bids were sent out with seven bidders responding. One Chula Vista bidder responded. Bidders were allowed to bid on any or all of the 14 bid items. Staff recommends award of contracts to the four lowest responsible and responsive bidders, as listed below. RECOMMENDATION: That the City Council accept the bids and award purchasing agreements to the lowest responsible and responsive bidders for the various construction materials as follow: Bid Items 1, 2, 10, 11, 13 to CalMat; Bid Items 3-7, 8, 9 to Sim J. Harris; Bid Item 12 to H.G. Fenton Companies (East County Materials); and Bid Item 14 to Nelson Sloan. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Bids were requested for the following materials, which are used daily or frequently by the Street Maintenance and Sewer Maintenance Divisions for the ongoing maintenance and repair of streets, sidewalks, and sewer laterals and lines: Item Materials Estimated Usage I Ready Mix Concrete (520-C-2500) 400 cubic yards 2 Calcium Chloride 20 gallons 3 Asphaltic Concrete Type 1lI-D-AR-4000 (3/8" aggregate) 1,000 tons 4 Asphaltic Concrete Type 1lI-D-AR-4000 (3/8" fine) 500 tons 5 Asphaltic Concrete Type 1lI-F-AR-4000 (Sheet Asphalt) 300 tons 6,7 Asphaltic Concrete Type 1lI-B@-AR-4000 (3/4" aggregate) I ,350 tons 8 RS-I Emulsified Asphalt 1,800 gallons 9 Asphaltic Concrete Type 1lI-D-SC-800 (Cold Mix) 300 tons 10 Class 11 Aggregate Base (3/4" maximum) I ,500 tons 11 Crushed Aggregate Base (1" maximum) 500 tons 12 Decomposed Granite 750 tons 13 Fill Sand 650 tons 14 Rip Rap, Miscellaneous (#2 Backing) 20 tons 7---/ Page 2, Item_ Meeting Date 11/4/97 Bidders could bid on any or all of the material bid items. The City specified that Items 1 and 2, and Items 3-7 be awarded as lots to the lowest responsible and responsive bidders. Calcium chloride (Item 2) is added to ready mix concrete (Item 1) at the plant, so the two items have to be awarded to the same bidder. Items 3-7 are types of asphaltic concrete that the City crews use daily at various locations throughout the City and must pick up at the plant. It is therefore appropriate to pick up these items from the same plant. The City requested separate bids for City pick-up of materials and bidder delivery of materials for Items 9-14 to make a comparison of the costs, since these types of materials could be stored at the Public Works Yard. Currently, a City maintenance worker is sent to pick up these materials which takes time away from performing maintenance work. Staff therefore evaluated the bids to determine if the bidder delivery cost was less than the bid for City pick-up plus the City cost of staff time and equipment usage. Location of the plant was also a factor in the award of the contract, since the greater the distance to the plant from the Yard, the greater the cost to the City for staff time and equipment usage to pick up the materials. The bids received are listed below for each item by bidder. Items 9-14 list the bid for City pick-up followed by the bid for bidder delivery. The lowest bidder for each item is highlighted. The location of the plant was a deciding factor in only one item, Item 10, since two of the bids were the same, but CalMa!'s plant was closer to the Yard than Sim J. Harris' plant. All of the lowest bids are for City pick up of materials. LIST OF BIDDERS FOR EACH BID ITEM FOR CONSTRUCTION MATERIALS Item Sim J. Harris CalMat- Nelson Sloan H.G. Bud's Alpine CA - San Diego San Diego - Chula Vista Fenton Trucking Rock & Commercial Companies - Block - Asphah . -San Diego Lakeside Alpine San Diego 1 No bid 4O.00/cy 54.75/cy 56.50/cy No bid No bid No bid 2 No bid 1.28/gal I.IO/gal .80/gal No bid No bid No bid 3 1!),QO/t!m 20.00/ton No bid No bid No bid No bid 23.00/ton 4 20.50/ton 21.00/ton No bid No bid No bid No bid 24.00/ton 5 23.00/ton 24.00/ton No bid No bid No bid No bid 31.00/ton 6,7 19.00/ton 20.00/ton No bid No bid No bid No bid 21.00/ton 8 1.2S/gal No bid No bid No bid No bid No bid No bid 9 23.00/ton 24.00/ton No bid No bid No bid No bid 30.00/ton 27.67/ton 28.44/ton No bid No bid 25.25/ton No bid No bid 10 5.00/ton S.OO/ton 6.50/ton 5.75/ton No bid No bid No bid 7.92/ton 8.29/ton 8.90/ton 9.00/ton 7.75/ton 9.02/ton No bid 11 No bid 6.00/ton 7.50/ton 8.50/ton No bid No bid No bid No bid 9.29/ton 9.90/too 12.25/ton 8.50/ton 9.02/ton No bid 12 No bid No bid 1O.50/ton S.SO/tOn No bid No bid No bid No bid No bid 12.75/too 9.00/too 8.60/ton 1O.54/ton No bid 13 No bid S .OO/tOn 9.50/ton 7.75/ton No bid No bid No bid No bid 8.29/ton 11.75/ton 9.00/ton No bid 1O.32/ton No bid 14 No bid No bid 1l.SO/ton 15.00/ton No bid No bid No bid No bid No bid 15.50/ton 19.30/ton 13.25/ton 23.65/ton No bid 7-",( Page 3, Item_ Meeting Date 11/4/97 The lowest bidders are as follows: Lowest Bidder Item Numbers Items Extended Price based on Estimated Usage CalMat 1-2, 10, 11, 13 Ready Mix Concrete, $ 29,775.60 Calcium Chloride, Class II Aggregate Base, Fill Sand Sim J. Harris 3-7,8,9 Asphaltic Concrete, $ 70,950.00 Emulsified Asphalt H.G. Fenton 12 Decomposed Granite $ 4,125.00 Companies (East County Materials) Nelson Sloan 14 Rip Rap $ 230.00 TOTAL $105,080.60 These bids are firm for the initial contract period of November I, 1997 through June 30, 1998. Under the terms of the purchasing agreements, the contractors will be allowed one price increase during each additional option year if there are 1) manufacturer or supplier price increases in the materials; 2) governmental or regulatory agency increases to the trade; or 3) Regional Consumer Price Index (CPI-U) increases to the trade. Increases of greater than five percent (5 %) from the prior year's price will not be allowed. The City will be the sole judge of acceptable option year price increases. It is also at the City's option to extend the agreements each year, contingent upon a mutual agreement between the City and the contractors. FISCAL IMPACT: Funds in the amount of $133,148 are provided in the Public Works Operations budget for FY1997-98 for these materials. The sum total of the lowest bids received is $105,080.60. Sales tax in the estimated amount of $8, 143.75 will be added to the materials costs, for a total estimated cost of $113,224.35. The cost to the City will be based on actual usage times the firm unit price, since materials usage may vary from the estimates. For example, if EI Nino brings more rain this winter, more sand for sandbags may be used, thereby exceeding the estimated tonnage for sand. However, the total cost should not exceed the funds budgeted. The General Fund will be reimbursed 100% from Gas Tax or Sewer Service Funds for all materials costs. h:\shared\engineering\admin\aI13conl.mat 7-3 RESOLUTION NO. /Yg'ff RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING BIDS AND AWARDING PURCHASING AGREEMENTS FOR READY MIX CONCRETE, CALCIUM CHLORIDE, ASPHALTIC CONCRETE, EMULSIFIED ASPHALT, CLASS II AGGREGATE BASE, DECOMPOSED GRANITE, FILL SAND, AND RIP RAP WHEREAS, on October 21, 1997, bids were opened in the office of the Purchasing Agent for the provision of various construction materials for the Public Works Operations Division for the period of November 1, 1997 through June 30, 1998, with the option of the City to extend the contract for five additional one- year option years; and WHEREAS, twenty-nine requests for bids were sent out with six bidders responding; and WHEREAS, bidders were allowed to bid on any or all of the 14 bid items; and WHEREAS, staff recommends award of contracts to the four lowest responsible and responsive bidders as follows: Lowest Item Items Extended Price Bidder Numbers based on Estimated Usage CalMat 1-2, 10, Ready Mix $ 29,775.60 11, 13 Concrete, Calcium Chloride, Class II Aggregate Base, Fill Sand Sim J. 3-7, 8, 9 Asphaltic $ 70,950.00 Harris Concrete, Emulsified Asphalt H.G. Fenton 12 Decomposed $ 4,125.00 Companies Granite (East County Materials) Nelson 14 Rip Rap $ 230.00 Sloan TOTAL $105,080.60 1 7-i NOW, THEREFORE, BE IT RESOLVED the city council of the City of Chula Vista does hereby accept the bids and award the purchasing agreements for Ready Mix Concrete, Calcium Chloride, Asphaltic Concrete, Class II Aggregate Base, and Fill Sand to CalMat in the amount of $29,775.60; for Asphaltic Concrete and Emulsified Asphalt to sim J. Harris in the amount of $70,950.00; for Decomposed Granite to H.G. Fenton Companies (East County Materials) in the amount of $4,125.00; and to Nelson Sloan for Rip Rap in the amount of $230.00, totaling $105,080.60. BE IT FURTHER RESOLVED that the Purchasing Agent of the City of Chula vista is hereby authorized to execute said purchasing agreements for and on behalf of the city of Chula vista. Presented by Approved as to form by John P. Lippitt Director of Public Works c:::- c::::= . C: \Res\Bids 2 7-~ COUNCIL AGENDA STATEMENT Item Meeting Date 11/04/97 11 ITEM TITLE: RESOLUTION / ~5 09 ApPROVING A $15,000 SEED CAPITAL CONTRIBUTION TO THE WESTERN REGIONAL BIOPROCESSING CENTER (WRBC) Community Development Director (' ~S. C;I, M'"'D'GS ~ 141.... Vote, y.._ ..~ SUBMITTED BY: REVIEWED BY: BACKGROUND: Dver the past year, the Western Regional BioProcessing Center (WRBC) has been seeking sponsors in order to obtain construction/equipment capital. as well as a state and federal tax.exemption. This formation stage has been supported by seed capital contributions from the City, the California State University, three San Diego biotech companies, an architectural firm, and WRBC's founder and President. Mr. Bruce Carlin. The WRBC is in discussions with a prospective corporate sponsor to provide major capital funding in exchange for priority scheduling rights for access to biopharmaceutical process design, scale.up and FDA.regulated production services. The purpose of the WRBC is to utilize this scientific research and development as a means to educate and train undergraduate and graduate university students in the growing field of bioprocessing. The WRBC is also currently concluding discussions with the State Franchise Tax Board and the IRS regarding its non. profit tax exempt status. Mr. Carlin estimates that these discussions should be concluded by the end of the year and is requesting additional seed capital to support the project through to those decision points. RECOMMENDATION: That Council adopt the resolution approving the contribution of $15,000 to the Western Regional BioProcessing Center. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: COUNCIL ENDORSEMENT In 1994 Council endorsed Mr. Carlin's efforts to develop the Western Regional Bioprocessing Center (WRBC) within the Eastlake High Tech/Biotech Zone in order to benefit the community by attracting new high tech value.added industry. This endorsement followed Council's acceptance of the results of a Feasibility Study which was jointly funded by Eastlake Development Company and the City. In Dctober 1996, Council approved a $20,000 contribution to help WRBC finance its federal tax exemption application and solicitation of major public and private sponsors. f)~/ Page 2. Item _ Meeting Date 11104/97 NON-PROFIT STATUS The WRBC has been seeking federal and state tax exemption as a scientific research organization which will encourage the development of the region's biopharmaceutical industry and aid in the scientific education of university students. As of the last report to Council. the WRBC had received state tax exemption contingent upon federal exemption. Meetings have been on-going with the IRS. A meeting has been scheduled for November 18 in Washington D.C. to resolve outstanding issues. The City's Deputy Attorney will attend and WRBC and the California State University Institute will be represented by a Washington, D.C. law firm engaged by the Institute. WRBC is also currently seeking a "stand alone" exemption from the state. Federal or "stand alone" State exemption will result in 24% California R&D tax credits being available to clients or sponsors. (The "stand alone" exemption would require a minor amendment to existing State R&D tax credit legislation.) We anticipate a final determination on tax.exempt status by year end. WRBC . BENEFITS TO THE CITY The WRBC anticipates that it will directly employ 50 to 75 people with salaries averaging in excess of $50,000 and generate approximately 180 "spin off" jobs. Additionally, the WRBC infrastructure could lead to the establishment of many new biotechnology companies and the location of biopharmaceutical manufacturing facilities throughout the area. Over a decade, it is anticipated that more than 1,000 students will train at WRBC's facility. The facility will bring a prestigious biotechnology operation to Chula Vista which will enhance the City's name recognition and image in the regional, statewide and national scientific research, education, and business communities. The WRBC will establish a high-profile, SDSU-administered "headquarters" for statewide university research, education, and training, further strengthening our association with CSU and SDSU. The WRBC has been a key element in the City's High Tech/Biotech Zone targeting strategy to create a Biotech Cluster. (The strategy has envisioned the WRBC acting as a catalyst to create "spin off" demand for industrial property in Phase II of the Eastlake Business Center by other biotech companies moving into commercial manufacturing. In staff's October 6, 1996 report, it was noted that Eastlake "may request a General Plan Amendment for non-industrial use (for Phase 11)..." This was also discussed in some detail in staff's report for the Industrial land Workshop held with Council on October 9. Rezoning of Phase II of the Business Center to a non-industrial use would limit the High Tech/Biotech Zone to Phase I which consists of approximately 32 vacant acres, the largest parcel of which is only 4.3 acres.) NEED FOR SEED CAPITAL CONTRIBUTION The proposed WRBC is projected to be self-supporting assuming that the initial construction costs are funded through a combination of public and private sources. (Existing Biotech contract manufacturing facilities on the east coast and in foreign countries have received significant levels of public funding. These facilities, unlike WRBC, are for-profit. While there is clearly an economic development benefit, no other similar facility offers the WRBC's educational/job training public benefit component.) The purpose of the Seed Capital Fund O:~ Page 3. Item _ Meeting Date 11/04/97 has been to finance the WRBC's efforts to establish its nonprofit status and to raise the capital needed for construction, now estimated at $20 to $25 million. The initial seed capital funds have financed legal, architectural design, travel, public relations, research, and other support costs. WRBC has been operating since October of last year on $107,000 in seed capital raised from three (3) San Diego biotech companies, a San Diego high tech firm, Cal State University Institute, SDSU, an architectural firm, Mr. Carlin and the City ($20,000 in CDBG funds). These funds were estimated to finance the project's formation stage for one year and have now been exhausted. Staff is recommending that Council authorize an additional $15,000 in seed capital to allow negotiations with the state Tax Franchise Board, IRS, and the corporate sponsor to be concluded. WRBC has projected a $30,000 budget for the balance of this year (see Projected Budget and Uses, Attachment 1). In terms of matching seed monies, the project continues to be supported by CSU and SDSU via significant in-kind staff time, particularly on the part of Dr. Stephen Dahms, Director of the CSU Program for Education and Research in Biotechnology (CSUPERB). Additionally, Cal State University Institute (CSUI) has pledged funds to cover the costs incurred by WRBC related to the November 18 trip to Washington D.C. to meet with the IRS, as well as to cover IRS-related legal fees, estimated to cost approximately $7,000 total. This leaves approximately an $8,000 balance. CSUI is currently pursuing an additional cash contribution from the CSU Chancellor's Office. (See letter from the CSU Chancellor Barry Munitz and from John Sibert, Director of the CSU Institute, Attachment 2.) FISCAL IMPACT: Council is being requested to reprogram $15,000 in 1993/94 CDBG funds from the High Tech/Biotech Zone EIR account to the WRBC. The $15,000 in seed monies would be used to cover non-IRS related legal costs, travel, overhead, etc. Council previously approved $100,000 in 1993/94 CDBG funds for a "master environmental impact report" for Phase II of the High T ech/Biotech Zone at the Eastlake Business Center. The need for EIR funds continues to be on hold. As noted, in October 1996, Council approved reprogramming $20,000 of these CDBG funds for the initial WRBC seed capital campaign. Staff is requesting that Council reprogram an additional $15,000. No General Fund or RedeveloDment Aoencv funds are beino reouested. There continues to be ongoing Community Development Department and legal staff support to facilitate this project. As noted, the Deputy City Attorney will be traveling to Washington on November 18 to meet with the IRS. The cost of this trip is estimated at $650 and will be paid from the Economic Development travel budget from funds added by Council for this type of business development purpose. ATTACHMENTS 1 - Projected Budget and Uses 2 - letters 3 - WRBC By-laws 4 - San Diego State University MOU ICOI H:IHOMEICOMMOEVISTAFF.REPII1.04.97IWRBC 10ctober 30,1997 111:10,mll ~.<~ RESOLUTION NO. / g--~ 6? 9 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A $15,000 SEED CAPITAL CONTRIBUTION TO THE WESTERN REGIONAL BIOPROCESSING CENTER (WRBC) WHEREAS, Council accepted the results of a Feasibility Study jointly funded by EastLake Development Company and the City; and WHEREAS, in 1994, Council endorsed efforts to develop the Western Regional BioProcessing Center (WRBC) within the EastLake High Tech/Biotech Zone to benefit the community by attracting high tech industry; and WHEREAS, the purpose of the WRBC is to utilize scientific research and development to educate and train undergraduate and graduate university students in the growing field of bioprocessing; and WHEREAS, in October 1996, Council approved $20,000 for the initial stage of the WRBC seed capital campaign by reprogramming 1993-94 CDBG funds set-aside in the High Tech/Biotech Zone Master EIR account and an Agreement for Donation Seed Capital was executed; and WHEREAS, the Western Regional Bioprocessing Center (WRBC) has been seeking sponsors in order to obtain construction/equipment capital, as well as a state and federal tax exemption; and WHEREAS, this formation stage has been supported by seed capital contributions from the City, the California State University, three San Diego biotech companies, an architectural firm, and WRBC's founder and President; and WHEREAS, the WRBC is concluding discussions with the State Franchise Tax Board and the IRS regarding its non-profit tax exempt status and with prospective corporate sponsors; and WHEREAS, funds are needed to cover non-IRS related legal costs, travel, overhead, etc. through those decision points; and WHEREAS, the expenditure of CDBG funds for this purpose is a qualified CDBG expenditure pursuant to 24 CFR 570.203(b). NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Chula Vista does hereby approve reprogramming $15,000 from the Council-approved $100,000 in 1993/94 CDBG funds from the High Tech/Biotech Zone EIR account to the Western Regional BioProcessing Center for seed capital. BE IT FURTHER RESOLVED that staff is directed to finalize, and the City Manager is authorized and directed to execute, an amendment to the Agreement for Donation of Seed Capital to the WRBC in substantially the form presented, with such minor modifications as may be approved by the City Attorney. Presented by Approved as to form by ~~ Chris Salomone Director of Community Development . [(CD) H:\HOME\COMMDEV\RESOS\WRBC,$ (October 30,1997 (9:43am)) ?~y ATTACHMENT 1 WESTER."! REGlUI'AL BIOPROCESSING CENTER ~ ':It" o[':h';\a -vista =a.if:rni~ St;!t~ IJni"'-~~~lt:v l11'ititut,. Boord ofT mstm B~u-:~ Cart in. M.B.A. Sidn~r '~r'O~n ['-:,r:ald F~ 5;,orl, P!-:.I< _',-;rr:trfrrAd-Ji,aryCo"!f17i1t>f r.. St~ph~n Di"l.nrns, P~.[, I1la1t~r L :"~nb~:g. P~.[, G~-a:d 0dstrt:h~l, Ph.D. G~:a.d Yabta:l. Ph.C'. S!'P.Mrlm G"',~rnQ[ F-ot,;, 'Jhlson ~<1n [:~go Stat~ IJni'r~rsit-/ ::or.gr"s';:TI;lr. B:-b Filn~:: :')r.g[e~s:-nar: B(Hln 3i\1xay ~bt~ Controll~r Kath;"~n CQ!ln~U :.~~ G';$cm CA Tr,d~ ~nc '::rr.m"[C''' .A.g~~(y ::;t:J.t~ S,=n:1-~or St~,.,.~ l?~il:~ Stat~ ll.~3~:nI::!y M'Omb~r S~~.~ Eald,.'..in '::t:J.t~ ^"ss~:n!::\v M~!I:b~[ :,'''!1is'': t.rlnr":1o [<I<:h~ny Mayix :;hi~~~y Ear!Qn C:tyofChulaVlst:< San Di~g0 E<:Qr 0mi<: [:,~,,,,,inFm~nt Corp Bi':)U::,IM;San Di~gc UCT "::D!'TUE':T :::;ur-'E?J3 :Can I'I'"g0 T~C)-1n'J\0gy C:;ul1l:il Gray ':a::, iJhl" :& :<[~iJf'nr:ch a Ca/:fo."m'J Ilan-p."qfit scimtif:.: r~Mrrh org'111j::;'fl!ion Bruce Carlin Pm-idont CONFIDENTIAL - VIA F A.X October 28, 1997 Cheryl Dye City of Chula Vista RE: Operating Budget Through Calendar Year-End Dear Cheryl: A breakdown of WRBC's budget and planned activities for the balance of this year is provided as follows: BUDGET - BALANCE OF 1997 Professional Services: Legal, Accounting, Tax-Accounting, Bookkeeping, Investment Banking and Management (Includes amounts past-due from September and October - see note 1) $20,000 Computing, telephone and office expenses 2.000 Legal expenses associated with Rights Offering: travel, memberships and miscellaneous expenses 8,000 TOTAL $30,000 Note 1 Professional sef1lices are being provided by Bruce Carlin, President of Tricor Capital, Inc. (TC/). Mr Carlin was elected President of Western Regional BioPrccessing Center (WRBC). but receives no compensation from WRBC other than through TCI. Neither Mr. Car/in nor TCI have any interest in WRBC, which IS a public benefit corporation. P.O Eo" 83848 . San Diego. CA 9213&-3848 . Fax619/223.9fjJ.j] . Tel 6191523.9260 '6~~ Ms. Cheryl Dye October 27, 1997 Page 2 On September 12, 1996, WRBC filed an application for a Determination of Tax-Exempt Status with the Internal Revenue Service (IRS). On November 18 of this year, WRBC will be meeting with the IRS regarding its application for tax-exempt status. A decision is now expected by year- end. The California State University Institute (CSUI) has engaged a Washington D.C. law firm to represent WRBC at this meeting. CSUI has also pledged to reimburse WRBC for its travel expenses associated with this meeting. GOALS FOR THE BALANCE OF THE YEAR: o Obtain a determination of tax-exempt status from Federal and/or State officials; o To make arrangements for the project financing, which is expected to close in 1998. o Develop action plan and related budget to carry WRBC through to bond issuance. Please call if you have any questions. Sincerely, 73~,,-,- c <4-~ cc: Shirley Horton g>~ ATTACHMENT 2 N S T CALIFORNIA I T STATE UTE UNIVERSITY Higher Education's Entrepreneurs October 22, 1997 Cheryl Dye City Of Chula Vista Community Development Department 276 4th Avenue Chula Vista, CA 91910 Dear Cheryl: The CSU and CSU Institute are strong supporters of the creation of the Western Regional BioProcessing Center an have been actively engaged in this process for over a year. The CSU Chancellor's Office invested $20,000 in the planning for WRBC in October 1996. Since that time, CSUI has played a facilitative role in working with Bruce Carlin to approach appropriate organizations and agencies. These have included meetings with the Kauffamnn Foundation and Lee Grissom, Secretary of Trade and Commerce. The Institute is the appropriate arm of the CSU to take on these tasks. It was created by the Trustees of the CSU four years ago to act as the entrepreneurial arm of the CSU, facilitating relationships and alliances between the 23 CSU campuses and business or government. While it is a 501(c)(3) corporation, the CSU is well represented on its Board by five campus presidents, one vice chancellor, and three sitting Trustees. A brochure describing the Institute is enclosed. During the past month, as Bruce Carlin has been dealing with the critical-path issue of not- for-profit status, the CSUI has taken a more active role, as has the Chancellor. Chancellor Munitz sent a letter (enclosed) to Jay Rotz of the IRS emphasizing the importance of the WRBC to the CSU and its educational mission. The Institute is supporting this effort out of operating funds by engaging an outstanding Washington attorney with extensive not-for- profit experience to carry the case to the IRS. I am also covering some of Bruce's travel expenses during this period. This contribution will certainly total several thousands of dollars over the next few weeks. I will continue to seek additional support from the CSU, but it will be a few weeks before that can be made available. I want to assure you of the CSU/CSUI support for this important project and look forward to working with you and the City of Chula Vista in getting this Center established. Cordially, ,l/~ ~1=~, t,hn Sibert €i) Vice President & COO Enclosures if- ? 400 Golden Shore, Suite 116 Long Beach, California 90802-4275 (562) 985-2826 Fax (562) 985-2047 http://www.co.calstate.edu/CSUI/ ATTACHMENT 2 ,,"".:':. .. '... ,.;, THE CALIFORNIA STATE UNIVERSITY BA1I.RY MUNrrz CHANCELLOR IAItEaSPIaD ~anc:o.. DO~"EZ ~.. FJU!SJrfO. FUU.Eltl"Otl. HAYWAaD" Ht.~OI.DT. UJIIrtO BBAOI. LOS A..'IOOnJ!S.. ~ ACADEMY.. MONl'DEY BA ,. ~.. POtoIOHA" SACil.-\..\4EHTO.. SAN 8ERNAaOINO" SAN DIBGO" SAN FItA'liCISCO_ SAN JOSIi .. SAN U:1S OBISPO.. SAN MARCOS . SOHO:\4A .. STANlSLAI:S October 17,1997 ~ Mr. Jay Rotz Exempt Organizations Unit Internal Revenue Service 1111 Constitution Avenue, N.W. Washington. D.C. 20224-0003 Re: University Support for Western Reginnal BioProcessing Center Dear Mr. Rotz: ~ This decade has seen previously unimaginable developments in the field of biotechnology. Since 1983. approximately 50 biotechnology products have been licensed bv the Food andDmg Administration. Unlike traditional medicines, these products are manufacrured by harvesting and purifying proteins from genetically engineered tnicroorganisrns and mammalim cells. under procedures supervised and approved by the FDA. There is a need in this rapidly growing field for individuals trained in applied biology. chetnistry and engineering. The 23 campus California State University (CSt.") is the largest public university system in North America. with more than 350.000 students enrolled in degree programs. CSU produces the majority of the Bachelors and Masters degree gradUates in the State. CSU desires to take a leadership role in training students to assume management positions in biopharmaceutical manufacturing, and in conducting acadetnic research in this area. Our San Diego State University campus has now entered into a Memorandum of Understanding with Western Regional BjoProcessing Center (WRBC) to admini~ter education, training and research programs in regulated biopharmaceutical manufacturing by utilizing the planned facilities and commercial contract manufacturing projects of WRBC.Such a program would be the first in the nation. Without question, this is a very innovative collaboration which will not only provide sound education and research opportunities for our students in an exciting field. but will also reduce the burden of government and insure an adequate supply of educated personnel to sustain this important industry. Western Regional BioProcessing Center has and will continue to receive financial and acadetnic support from the CSU. We strongly support WRBCs application for a determination of tax exempt status. as WRBC's future-and our academic plans in this area depend on it. An adverse ruling would certainly dismpt the university's plans for this significant educational program and would derail the establishment of this important facility. _ Your personal interest in this case is sincerely appreciated. Should you have any questions about the depth of our comtnitment to WRBC. please don't hesitate to call me. ~ Sincerely, ~ Chancellor 400 Golden Sboft. Lmalllleacb, CWfomia 9OIIOZ-4Z15 Teld"", (5621 985-2808 Telephone (5621 985-2800 g~J ATTACHMENT 3 BYLAWS OF THE WESTERN REGIONAL BIOPROCESSING CENTER A CALIFORNIA PUBLIC BENEFIT CORPORATION ARTICLE I OFFICES SECTION 1. PRINCiPAL OFFICE The principal office ofthe Corporation for the transaction of its business is 957 Tingley Lane located in San Diego County, California. SECTION 2, CHANGE OF ADDRESS The county of the Corporation's principal office can be changed only by amendment of these Byla\'\is and not otherwise. The Board of Directors may, however, change the principal office from one location to another within the named county by noting the changed address and effective date below, and such changes of address shall not be deemed an amendment of these Bylaws. SECTION 3. OTHER OFFICES Tbe Corporation may also have offices at such other places, witllln or without the State of California, where it is qualified to do business, as its business may require and as the Board of Directors may, ITom time to time, designate. ARTICLE 2 PURPOSES SECTION 1. OBJECTIVES AND PURPOSES This corporation is a non-profit public benefit corporation and is not organized for the private gain of any person. It is organized under the Non-profit Public Benefit Corporation Law of the State of California. Western Regional BioProcessing Center (WRBC) has been organized and will operate exclusively for the 'scientific' purposes described in Treasury Regulation Section 1.501(c)(3)-1(d)(5) ofaiding the geographic area by encouraging the development of the g-~9 WI !S'1l 'RN Rl!UIONAL BJOPROCI ,SSING CENTI!R Bylaws Page 2 area's biophannaceutical industry, and aiding in the scientific education of university students. In furtherance of these exempt purposes, WRBC plans to be involved in certain commercial endeavors, which are necessary for and suhstantially related to its exempt purposes. The WRBC plans to finance, design, construct and operate certain biopharmaceutic31 research, education, training, process design, development and production facilities. These fully-staffed facilities will provide the area's biopharmaceutical industry with needed process design, scale-up and production services, thereby aiding the geographic area. Simultaneously, the WRBC will provide the CaJifomia State University (CSU) System and its students, fellows and interns with the leading-edge, large and small-scale process design., scale-up and production projects and FDA-regulated facitities necessary to support world-class, "hands-on" education, training and research in regulated biopharmaceutical production methods and procedures, at no cost to the University. To capitalize the WRBC, Assignable Limited Priority Scheduling Rights (the Rights) for not more than 67% of schedulable facility time will be conveyed to major sponsors for not less than fair market value, as determined by independent appraisaL The remroning schedulable time ",ill be available, on a first -come, first -served basis to otber users, thereby encouraging the development of the area's biopharmaceutical industry. Such faciJity and staff time allocations will provide priority scheduling in the event the facility and staff would otherwise be over-subscribed from time to time, as an inducement for the financial support necessary to fund the organization's facilities and working capital requirements. Additional capital may be provided ITom public and other private sources as grants, loans or otherwise. All WRBC clients will be charged WRBC's full cost of providing any services, including costs WRBC incurs in supporting the San Diego State University (SDSU)-administered research, education and training programs. (SDSU is the largest campus in the CSU System and the closest CSU campus to the WRBC's planned location.) Rights holders and other financial supporters will not receive a preference regarding fees. ARTICLE 3 DIRECTORS SECTIONl. ~ER The Corporation shall have three (3) directors and collectively they shall be know-n as the Board of Directors. The number may be changed by amendment of this Bylaw, or by repeal of this Bylaw and adoption of a new Bylaw, as provided in these Bylaws. \l.Ti'u,;'.,hy1aws5.w.x: 8~//) ATTACHMENT 4 MEMORANDUM OF UNDERSTANDING This Mcmorandum Of Understanding (MOD) is entered into between WestemRegionaJ BioProcessing Center, a California public benefit corporation ("WRBC") having its principcl place ofbusin~ss at 957 Tingley Lane, San Diego, CA 92106 and the San Diego State University ("SDSD") having its principal place of business at 5500 Campanile Drive, San Diego, -CA 92182, being sometimes collectively referred to as ("Parties" and individually as "Party"), for the purpose of setting forth the mutual objectives, understandings and agreements of the Parties with . respect to the objectives set forth'herein. RECITALS The Parties contemplate working together toward the. following objectivcs:. 1, SDSU desires to offer its students and fellows specialized world-classprograInS and internships in "bands-on" education, training and research in regulated biophannaceutical production methods and procedmes' (the PrOgrdIIlS), to prepare them for a career in the biopharmaceutical industry, which ,,-ill aid the geographic area by enccuraging the development of the area's biopbarmaceutica.l industry. .' 2. Western Regional BiuProcessing Center (WRBC) has been organized and will operate exclusively for the 'scientific' purposes described in TreilsuIy Regulation Section 1.501 (c )(3)-1 (d)(5) of aiding the geographic area by ellcouraging the development of the area's biopharmaceutical industry, a!1d aiding ill the scientific education of university students. In furtherance of these purposcs, WRBC pInns to finAnce, deSign, construct and operate certain biophannaceutica.l reSearch, education, training, process design, development and production facilities, a!1d:to provide related services to the biopbarmaceutical iIldustry (the Projects) ill furtherance of its 'scielltific' purposes, and fur nu commercial purpose. 3. Usillg jointly-solicited seed capital, the parties are working together to solicit and obtain grdDls and financing proceeds of approximately $35 million (the "Capital Campaign Funds" and the "Capital Campaign'') for the purpose of fundillg the WRBC's planned facilities and working capital requirements, as more fully described in the WRBC;'s bylaws. ... . .. .'. "" . .',' ~ "'.-: "" ....,.,,, .... .,,/.;. ,', . ..:.' .." ,." " " .... .,' "' ~ .'- '. -.-.. g-~ ) / MOU Page 2 4. SOSU desires the permanent use of the WRBC's'tacilities and to be involved in the WRBC's Projects to support its Programs. Such Programs will be conducted at the proposed Facilities and on the campus of sma:. The Parties have diverse capabilities and interests, and the Parties have determined that they would benefit !Tom working together to achieve the foregoing purposes. Prior to the successful completion of the WRBC's Capital Campaign and the completion of the facility, this MOU is intended to govern the relationship between the Parties hereto and serve as an interim agreement Now, therefore, in consideration of the mutual promises contain.u herein, the Parties agree as follows: 1. Organizational Support. SDSU agrees to use diligent efforts to proYide organizational support to the "''RDC associated with the Project, as sct forth in Exhibit A. Furth=ore, SOSU agrees to provide such supporl exclusively to the Western Regional Biol'rocessing Center, and not to any potential competitors of the WRBC. The WRB C agrees to work exclusively with SDSU as thennmini=or ofbiophm:rnaceutical nianufacturing-relaied research, education and training programs. Upon the completion of the Capital Campaign,.1I1e WRBC and SOSU agree to negotiate in good faith an agreement covering SDSU's use of the WRBC's facilities for research, education and training programs to be administered by the SDSU. Thisagreemenr will designate these facilities as official "core" facilities of1l1e California State Umversity System. In the event 1I1e Parties are unable to agree upon the essential 1=5 of such'an agreement, any disputes will be resolved by arbitration or other alternative dispute resolution processes. 2. Management. The WRBC's Board of Directors and Officers will manage all the WRBC business, SDSU will provide organizational support on an ~as needed" basis. 3. Public Disclosure. Any news releases, public announcements, advertisemenr or publicity releases cotlCeming this agreement will be subject to the prior approval of 1I1e WRBC and SDSU. 4. Term. The term of this MOU shall continue until onc ofthc following conditions have occurred: (i) a long-term. detailed agreement is executed to replace this MOU, or (ii) a party terminates the MOU pursuant to Section 5 below, or, the second anniversary of the effective date of this MOU. The intcnt is that this MOU is a bridge to a final long-term agreement. - . ,-' >-:':;." .: '/. .. .... '.>0- ..... ~ .,,~, .!., .. - . .,,' f)-/c2 .:.':-. '. ." MOU Page 3 5. Termination. This agreement may be terminate.d by the WRBC if it, in it~ sole discretion, elects to dissolve, or determines that it will be unable to offer the 24% tax credits on qualified research and development expenditures available 1.mder sn 38 (1996). This MOU may be terminated by either the WRBC or SDSU if either determines (i) that the Project or the Capital Campaign is not feasible, or (ii) that the other party is not performing its responsibilities as specified in this MOU. 6. Notices. All notices, certificates, acknowledgments and other respects hereunder shall be, in writing and shall bc dccmed properly delivered when duly mailed by U.S. mail or faxed to the Piillies as provided below: fax: 619 594 6381 Western Regioml BioProcessing Center Attn: Bruce Carlin .P .0. Box 83848 San Diego, CA 92138 fax: 619 223 9682 San Diego State University Attn: Donald Short, Ph.D, San Diego, CA 92l82-D4l3 7. Miscellaneous. (a) This'MOUis intended to create aformal business arrangement between the Parties, ' No Party.shall bavethe right to bind the other Party. (b) This MOD shall not oc amended, modified nor e"1:ended;nor Shall any waiver of any right hereunder be effective unless set forth in a document executed ,?y all of the Parties, 8. Entire Agreement. This MOU, until superseded, contains all of the agreements, representations and understandings of the Parties hereto and supersedes and replaces any and all previous understandings, commilmtmlS, ur agr""IIlents oral or written, reWed to the substance hereof. 9. Severability. If any pari, term or provision of this MOD shall be held void, illegal, unenforceable or in conflict with any law of the federal, state or local government having jurisdiction over this MOU, the validity of the remaining portiOI15 of the provisions sball not be affected thereby. 10. Governing Law. This MOU shall be interpreted by the laws of the Sta1e of California. . - .,. -." .:,,- .. ,_. " -,. '., -" .--,. Q-;3 :-.iOU Page 4 11. Counterparts. This Agreement may be executed in two or more counteIparts, each of which shall constitute an original but all of whic~, taken together, shall constitute but one COlltract. In witness whereof, the Pf.Iliies haye caused this Agreement to be duly execured this 24J.l; <:lay of ct..,v"r,f- , 1997 San Diego State University Western Regional BioProcessing Center a California Public BCllcfit Corpomtion by: by: Don Short 0)';;1/ Bruce Carlin President ~<-~ '..i ." .... .. . '.:' ~ . .~-' ..<...... .,";, <,,' ..... ...., :....... 0>/1 MOD Page 5 EXHIBIT A SCOPE OF WORK TO BE PROVIDED BY SDSU Organizational Support Services: . SDSU will continue to assist the WRBC in meeting its Seed Capital requirements . . SDSU will assist in the Capital Campaign as needed, with non-personnel costs being reimbursed by the Vv1lBC, as budgeted. . . SDSU will develop and implemcnt the specialized researcb, education and training programs that will be a central purpose oftlie V.fRBC. . SDSU will provide assurance to the WRBC's sponsors that such prograrnswill be available at the \VRBC facility or on the campus of SDSU. .. . .~.'\... . :.,.'",1.:" ." *'," f!:'> /3 .'.... .. . .".".. .., ... Si1SiJ 5rnOiegoSrotGUnr/ersity CclleqeafScienms S500 Cmiporu1e Drne S..lhgoCA 92182.4610 619'5'14.5]42 FIX: 619-59406381 E-mait offIte@sdQl1ces.sdw.edu September 2, 1997 Garland A. Carter Chief, Exempt Organizations Rulings Branch 5 Internal ReyeIJDe Service CP:E:EO:T:5 1111 Constitution Ave. N.W. Washington, DC 20224 Re: SDSU Affiliation with Western Regional BioProcessing Center Dear Mr. Carter: As Dean of the College of Sciences at San Diego State University, and a founding Director of Western Regional Bloprocessing Center, I wish to address the subject of the integral nature of WRBC's proposed commercial activities to both its and the University's purposes. The proposed WRBC opr:rations are not merely a source of income for the WRBC, but rather will serve as a necessary predicate to furthering both the WRBC's and the University's purposes of supporting and providing, respectively, "bands-on" biopharmaceutical manufacturing research, education, and training programs in a current Good Manufacturing Practices (cGMP) FDA-regulated environment. The reasons for this are as follows: " 1. General1aboratory spaces can't be used to fuJly train students pursuing careers in regulated biopharmaceutical manufacturing operations, or to support university research in related chemical engineering areas, requiring large-scale facilitics and equipment. 2. The large-scale production of medicinal proteins involves large quantities of media and growth factors, which are very expensive. Even the cost of such materials for an individual intennediate-scale 1000 liter cell culture run can exce~d $10,000. 3. Training at small scale does not fully prepare students to work at large scale, where safety. engineering. cell or microbial growth and recovery and quality of product are inherently different. 4. Training in the nbsence of an FDA regulated facility does not fully prepare students to work in an fDA-controlled ~real-world" environment. 5. The FDA does not regulate and inspect general university facilities. 6. The commercial technologies, including the FDA-regulated computerized control and manufacturing tracking systems, utilized in biopharmaceutical manufacturing '!HE ().;.!fORNIA STATE UNMJ!.SlTY .Bol:.er..i.IiI.Cllico .OcmhlJle: Ilk. frt5Ol. Fu!leltou .Hl/'fVI\I!d .ltull'lboWt. ~na 8eocholosb;lli!es .MtII&11I1I:alemy Marll!f~IIay.!-IorIhli.g..l'oro<<IG. SIICIU"ntnh.Sm 1111_o-SonDil9O'~ F~tG .Sm.k6e.So::n I,ui,OWpo.S<. ,',1QItoI.5aK1fU!'SfW;ICIIs '. " ;?-/j. ," ,,^ '0 are changing rapidly. Keeping-up with such technological advancement. for training purposes, is expensive and outside the scope of the university budget approval process. .. 7. By law, the production of clinical and commercial biopharmaccuiicals can only be done under stringent controls administered by the FDA. The magnitude of the regulatory requirements, in both a physical and reporting sense. are extraordinarily high, and the reS1rictions and rules arc extraordinarily complex. The physical plant:. water. steam. air handling. security and other systems present in a cG1viP facility are very special, and expensive. The cost of operating such facilities is simply beyond the reach of any univcrsity or univer:;ity system., even if it had the capital funds to construct them, which it doesn't. 8. CDIporote scientists in genetic engineering and related fields are at the leading edge. By allowing students to be involved in the process design and scale-up of novel commercial compounds, they "ill gain valuable insights, knowledge and experience thatwould otherwise not be available to them. Theretore. world-class research. education, and training in regulated biopharmacc:utical manufacturing requires such facilities and projects as those that will be available to San Diego State University and the 22-campus California Slate University System through its operating collaboration with the WRBC. It is for these reasorls that I conclude that the proposed commercial activities of the WRBC are necessary faT, in furtherance of, aod substantially related to its exempt purposes. S.irrtere1y, 'l-<.~ f. r {L AiL it Donald R. Short Dean, College of Sciences San Diego State University Director, Western Regional BioProccssing Center ',.;.. g-- /?